Q&A: A Social Network Built on Mobile Phones

Even before Facebook had an iPhone app, MocoSpace, a social network that appeals to a young, diverse demographic, had capitalized on the idea of networking via mobile devices.

MocoSpace

MocoSpace built its social network for use primarily on cellphones.

From its inception, MocoSpace was designed for use not on smartphones but on traditional “feature” phones, which account for 80% of its traffic. The social network encourages users to find new friends online, and people can search and filter by gender, location and age among other criteria. It incorporates music, photos, videos, chat and games into the mobile and Web platforms.

MocoSpace has only a tiny slice of the social-networking pie. Facebook has 400 million active users as of February, while MocoSpace just hit 13 million registered users this week. The organization was not able to specify beyond “in the millions” how many of them are active users, defined as having logged into their accounts within the past 30 days.

When they designed the MocoSpace application in 2005, cofounders Justin Siegel, 38, and Jamie Hall, 37, didn’t know what audience they would have: 81% of users are under 30 years old, and 70% are African-American or Hispanic, according to the site. Now, Mr. Siegel said he thinks mobile products like MocoSpace help bridge a digital divide.

“They’re putting the power of the Internet into the hands of people that don’t necessarily have the means to access it,” he said. “[Our users] don’t have MacBooks and broadband PC connections, and they’re not all sitting at their desk all day working in front of a desktop or laptop. I think it’s great the Internet is something that everybody has equal access to.”

A July report from the Pew Research Center found 87% of African-Americans and Latinos own cell phones — a higher proportion than the 80% of white Americans who do. In addition, minorities use their phones for more types of activity, including playing games, watching videos and using social-networking websites, the study found. And young people also use mobile-data applications at a higher rate than average, according to the research.

The unintentional tapping of this market has worked to MocoSpace’s advantage. The site has raised $7 million in venture capital and is projected to generate more than $10 million in sales — made up mostly of ads — this year. Revenue has doubled annually within the past three years, Mr. Siegal said.

Mr. Siegal spoke with Digits about what makes MocoSpace unique and how the popularity of smartphones actually has created challenges for the business.

You were one of the two people who helped start MocoSpace. Can you tell me how the idea came about?

We saw what was happening in the online social networking space: Friendster, MySpace, YouTube. And we thought that was really interesting and ultimately it’d make a lot of sense to deliver a similar type of social networking on mobile devices. Of course this was all before the iPhone, Android — the whole smartphone revolution. In a nutshell, we decided to take what seemed to be working on the Web and thought there’s no reason a kind of mobile optimized version of that wouldn’t do very well.

How did the smartphone revolution alter your game plan?

Good news was the smartphone revolution has really raised awareness among users that their cellphones can be a lot more than voice and text messaging and deliver a much better user experience. These new devices were a lot better. The things I can do are much more powerful than the older phones and so all and all, terrific. The fact that Steve Jobs and guys like HTC have done such a good job delivering beautiful, usable devices for the marketplace have just driven an explosion in interest around mobile computing, mobile Internet and all that.

The downside was that when the phones were pre-iPhone, we understood that space very well. We understood the dynamics. We understood the phone capabilities. We understood the opportunities. And our skills and experience provided pretty good advantage on that space. Whereas with the new smartphones, it’s opened up the new possibility of what you can do with that phone. We had to make adjustments.

How did you and Jamie know to tap into this market?

Jamie and I were working for an Israeli startup together that was focused on the Web for a while. This was during the dot-com boom. As it started to go bust, our investors suggested our company look at mobile solutions. But over time talking to the players in the space, namely wireless carriers, we found they were among other things excited for consumer opportunities for mobile Internet. That’s what kind of got us turned onto mobile.

In terms of specifically social networking — some of the stuff we did in gaming involved multiplayer games so we knew there was an interest in people to socialize on the phone. It sounds kind of ridiculous, right, because obviously the phone is all about communication and socializing and stuff. I don’t want to speak for everybody, but it’s kind of safe to say like us, most companies building games and applications for mobile phones back then weren’t really thinking social implications of combining the social aspects of the phone with games, just building these standalone games for the phone. When we saw some of what was happening in the multiplayer stuff that we were doing as well as what was happening online with guys like YouTube, we thought you know there should be an opportunity to take what those guys are doing for mobile.

What makes your revenue model successful?

Unlike most of the social networks — Facebook, where the fastest growing demographic are women over 55 — for MocoSpace, we’re very young and multicultural. In terms of targeting, MocoSpace is a great site for brands interested in reaching the young kind of hip urban demographic, in particular the Hispanic and African American market. Whether it’s Spike TV, the Census or K-mart back to school, we’ve had some successful campaigns going after that market.

How is MocoSpace different from more prominent social networking sites, such as Facebook and MySpace?

First off, we always assumed our user has nothing more than a feature phone. So most social networks — the MySpaces, the Facebooks, the Bebos — started from a Web perspective and have built mobile satellite properties. But those guys do not let you do lots of things from a mobile phone, for example create an account, change your privacy settings and customize the look and feel, customize the look and feel of your profile.

We offer a much richer experience where the feature set on MocoSpace is richer than those guys. That’s one thing. The other thing is the use case. For us, the use case is built around the concept that people will use MocoSpace to find new friends as opposed to leveraging your existing networks. I think Facebook pretty well owns the market and the use case for connecting you to people you know and are connected to in your nondigital life and being a tool for that. MocoSpace is all about being a tool for people to find new friends to connect with.

Is that why when you’re perusing the website, you see strong messages about safe online practices with strangers?

That’s just general safety. We always try to be following best practices, if not leading the charge in terms of making sure MocoSpace is a safe experience and educating people on it. We have a full-time team of community managers on site, tracking issues, looking for problem areas, addressing them as quickly as possible.

We are pretty aggressive with building awareness around that and the tools we offer users surrounding privacy settings. Those privacy settings are in particular around age, so people who want to only be dealing with people 18 and over can choose that setting. People can set privacy settings for friends only. I don’t know if we have any new or different tools from what MySpace and Facebook are using today but obviously since 2005 I would say safety has evolved across all the sites pretty significantly.

I created an account recently, and I noticed I automatically had two friends. Jamie and Justin. Are you two the MySpace Tom of MocoSpace?

I guess you could say that. What we like to do is make sure when users join, they have us as friends so they know obviously where they can go for information. Jamie and I will typically send out monthly newsletters, information about our site. We want people to understand from the getgo we’re official employees of the company, are official sources of information for them.

What are some of the more unusual messages you’ve gotten?

We get invited to weddings for people who have met over MocoSpace. People that will offer to do things. “I got a MocoSpace tattoo, can I get a T-shirt or something like that?” Marriage proposals, invitations to come visit people and see their country or their state, try their chili recipe. We don’t usually get marriage proposals. Just every so often. Frankly, we get so much thrown at us. We get thousands of messages a day. We don’t read but a handful a day, so there’s plenty that go missed everyday, so who knows what’s in there.